Here’s How Obama Plans to Boost Spending and Get Rid of Sequestration
“The president believes we should end the era of manufactured crises and mindless austerity,” the White House said in advance of the release of the Obama administration’s budget plan for the upcoming fiscal year. This is by no means a new theme; the president used a nearly identical line in speech touting the economic recovery that he gave at Northwestern University last October. Ending austerity is a key tenet of President Barack Obama’s mission for the final two years in the White House — a package of policies designed to improve what he has called middle class economics. That is the guiding ethos behind his budget, which will be released February 2.
Obama will propose $74 billion more in “discretionary investments” than would be allowed under sequestration — the automatic discretionary spending cuts to government spending that began in March 2013 — according to the hints given by White House Press Secretary Josh Earnest on Thursday. That represents an increase of approximately 7%. The Obama administration has not attempted to downplay the scope of its budget nor its intent to fully negate the effects of the across-the board spending cuts agreed to by both parties; as Earnest made clear, the budget proposed to Congress will “fully reverse” the so-called sequestration cuts to domestic spending, while also increasing spending on national security programs by an equal amount. The budget will be “fully paid for with cuts to inefficient spending programs and closing tax loopholes,” but exactly how the dollars and cents come together will not shared until the Monday release. Ostensibly this means more spending on education, financing sick leave, and health care, hardly bipartisan goals.
The Republican leadership was not surprised by the president’s budgetary aspirations, as Don Stewart, Senate Majority Leader Mitch McConnell’s deputy chief of staff, told PBS Newshour. But his budgetary goals really are just aspirations. “Previous budgets submitted by the president have purported to reverse the bipartisan spending limits through tax increases that the Congress — even under Democrats — could never accept,” noted Stewart. November’s congressional midterm elections were more about voters’ dissatisfaction with Washington’s political dysfunction than anything else. Yet, the results, which gave the Republicans a modest, though not veto-proof, majority in the Senate and the largest presence in the House in more than 80 years, were by no means a ringing endorsement of the president. Even though voters wrested control of Congress from his party and despite the fact that any budget needs to be passed by both houses of Congress, Obama did not shirk pushing his spending priorities. Obama aides believe the improving economy, which pushed fourth-quarter gross domestic product to its biggest quarterly increase since late 2003 and created the best period of job creation since the late 1990s, will give the president more credibility to pursue his middle class economics. And, the smaller federal deficits, lower gas prices, and declining unemployment have improved Obama’s job approval rating, which hit 50% on Monday for the first time since May 2013, according to Gallup.
The pomp and circumstance of the State of the Union address has always afforded President Barack Obama, and other skillful presidential orators before him, to weave a bit of magic. Aimed at drawing in less politically engaged voters into the folds of the Democratic party ahead of the 2016 presidential elections, the president’s annual address was a description of a brave new world he planned to create through his conception of middle class economics. If only one word could be used to describe Obama’s demeanor during the State of the Union, it would be liberated. He did not act as if his party’s power had been drastically decreased thanks the results of the midterm elections, although the Democrats lost nine seats in Congress, giving the Republicans a slight majority. With congressional midterms in the past, the president and his agenda are less constrained by congressional Democrats worried about retaining their seats.
Once the midterm elections pass and a president enters the final two years of his term, he is typically referred to as a lame duck, primarily because his waning time in office gives him less political influence. And Obama faces the added challenge of a Republican-dominated Congress; the midterm elections gave the GOP control of Congress. Outwardly, Obama appears unconcerned with his time limitations or his political limitations in Congress. He calls the final two years of his presidency the “fourth quarter,” because “interesting things happen in the fourth quarter,” as he said last month. Yet to say he feels no urgency would be inaccurate. What makes the fourth quarter of sporting event, and the final “lame duck” years of a presidency, interesting is that sense of urgency. Obama has a legacy to leave, and it is clear that putting the middle class back on the road to prosperity is a key goal. But his route depends on boosting government spending.
Meanwhile, Republicans in Congress still believe the government spends too much, and expecting that conservative lawmakers will not support Obama’s budget is an easy prediction to make. Republicans have admitted that the national deficit level is at a better place now than it has been in the past, even if they see issues with the outcome. “Look, things are getting better,” admitted House Majority Leader John Boehner, but he claimed in an interview with CBS news that the middle class and American poor have failed to benefit from Obama’s policies, which have only mad income inequality worse. Obama “never got serious about doing the kind of reform that would put America’s fiscal health in proper shape,” he noted. In the same interview, Sen. Mitch McConnell (R-Ky.) took a more offensive tact, saying, “We added more debt during the Obama years than all the presidents from George Washington down to George Bush.” For reference, in 2014, the U.S. budget deficit both dropped and shrunk as a percentage of GDP. In dollar terms, the deficit for the past fiscal year was the “lowest since 2008,” reads the October report from the Department of the Treasury. And Obama noted in his State of the Union address that our deficits have been “cut by two-thirds” during his administration, although it is projected to increase in 2015 before declining once again.
But when asked by a reporter during a January 28 press conference whether the White House expects “blowback” from Congress, Deputy Press Secretary Eric Schultz not only failed to answer the question, but failed to be coherent, at least in his first sentence. “I think that what we expected was that when the President put forward this plan, in order to lift opportunities for the middle class to achieve higher education, we wanted to make sure that the focus was on expanding that economic opportunity,” he said. “Over the past six years, we’ve seen significant economic progress across this country, and that includes, by the way, the longest stretch of job creation in our nation’s history, and last year marking the highest number of job growth for a calendar year since the late 1990s. But we’ve also seen that the middle class hasn’t always enjoyed the prosperity that some at the top have. So what the President is focused on and what we expected was to have a conversation now about middle-class economics, so that more and more Americans in the middle class could enjoy that prosperity.”
However, Obama does hold one card: Republicans would like to see spending on defense grow, as would the Pentagon. Military leaders warned the Senate on Wednesday that further sequestration cuts would be harmful and impede the United States. “Essentially, for ground forces, sequestration even puts into question our ability to conduct even one long, prolonged, multi-phase combined arms campaign against a determined enemy,” Gen. Raymond Odierno, the Army chief of staff, told the Senate Armed Services Committee. His words have important context. Analysts expect the war against ISIL will be difficult this year. The extremist group has shown itself to be capable of holding ground — much more than al Qaeda ever was. Furthermore, in both Iraq and Syria, the group has changed tactics to make itself less vulnerable to airstrikes. U.S. troops, which now number 3,000, are expected to be more in harm’s way this year, as they will no longer be confined to the relatively safe region of Kurdistan and the capital of Baghdad. Now, 300 troops are stationed at al-Asad air base in Iraq’s hotly contested Anbar province, but more will soon arrive. The key question for 2015 will be whether U.S. commanders ask the Pentagon for more forward deployment of American troops.
Like Democrats, Republicans would like to see the sequester eliminated, but GOP lawmakers do not like the Obama proposal because it includes too many tax hikes and too much spending. “Republicans believe there are smarter ways to cut spending than the sequester and have passed legislation to replace it multiple times, only to see the president continue to demand tax hikes,” Cory Fritz, a spokesman for Boehner, told USA Today. “Until he gets serious about solving our long-term spending problem it’s hard to take him seriously.”
Still, Earnest described Monday’s formal budget release as “the beginning of a negotiation” with GOP lawmakers.
Follow Meghan on Twitter @MFoley_WSCS